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MGD operators are subject to penalties when they fail to:

• file their return on time
• make their payment on time.

Late-filing and late-payment penalties will be managed automatically within ETMP and the appropriate penalty documents and payslips will be issued by ETMP.

Late-filing penalties

Penalties apply where there is a failure to file an MGD return by the due date. A penalty period of 12 months is applied following any failure to file on time and any subsequent failure during the 12 month period will result in an increased penalty. »Ê¹ÚÌåÓýappre is a penalty charge for each failure to file on time.

»Ê¹ÚÌåÓýapp penalty period is only ‘resetâ€� following 12 months filing compliance; in other words, returns are filed on time for the subsequent four quarters.

Late-filing penalties will be applied as follows.

At the first instance of failing to file on time  £100

Second instance                                                          £200

Third instance                                                                £300

Fourth instance                                                            £400

And subsequently                                                       £400

»Ê¹ÚÌåÓýappre are also tax-geared penalties of 5 per cent of any duty that remains unpaid at six months after the penalty date, or £300, whichever is greater. Continued failure to file at 12 months will result in a work item being created on an ETMP worklist for Compliance officers to review and take appropriate action.

Late-payment penalties

Penalties apply where there is a failure to pay the MGD due by the due date. A penalty period of 12 months is applied following any failure to pay on time and any subsequent failure during the 12 month period will result in an increased penalty. »Ê¹ÚÌåÓýappre is a penalty charge for each failure to pay the amount due on the return on time.

»Ê¹ÚÌåÓýapp penalty period is only ‘resetâ€� following 12 months payment compliance; in other words, payments are made on time for the subsequent four quarters.

»Ê¹ÚÌåÓýapp first failure to pay on time results in a penalty warning letter at which time the penalty period will be set. Any subsequent default will result in a penalty as follows:

Second instance      penalty is 2 per cent of the duty unpaid by the due date.

Third instance            penalty is 3 per cent of the duty unpaid by the due date.

Fourth instance        penalty is 4 per cent of the duty unpaid by the due date.

And subsequently   penalty is 4 per cent of the duty unpaid by the due date.

»Ê¹ÚÌåÓýappre are also tax-geared penalties of 5 per cent of any duty that remains unpaid at six months and 12 months from the date of failure.

Taxes Acts penalties

MGD operators are also subject to ‘behavioural penalties�; in other words, Taxes Acts penalties which are raised by Compliance officers via the National Penalty Processing System (NPPS) using existing processes in DMBM569060. However, there is a notable exception in that unlike existing Taxes Acts penalties, MGD behavioural penalties are interest-bearing.

Interest

Interest is charged on late-payment of all MGD charges including penalties. »Ê¹ÚÌåÓýapp due date for payment of MGD is 30 days after the end of the relevant return period.